The $100 Startup

1. Price your product or service in relation to the benefit it provides, not the cost of producing it. 2. Offer customers a limited range of prices. 3. Get paid more than once for the same thing.

The key to this strategy is to offer a limited range of prices: not so many as to create confusion but enough to provide buyers with a legitimate choice. Notice the important distinction that naturally happens when you offer a choice: Instead of asking them whether they’d like to buy your widget, you’re asking which widget they would like to buy. Options for creating a price range include: Super-Amazing Version (Gold, First Class, Premium), Product + Setup Help (the same thing sold with special help), and any kind of exclusivity or limited-quantity selection.

Almost any business can create a continuity program. Speaking of book clubs, there is also a Pickle of the Month Club, an Olive Oil of the Month Club, and a Dog Treat of the Month Club. In Portland, my friend Jessie operates a Cupcake of the Month club. If you like bonsai plants but aren’t able to keep them alive very long, the Bonsai of the Month Club is for you, but you’ll have to choose among four competing companies that offer different versions.§ Why is getting paid over and

INCREASE CONVERSION. Once you have a stable base of attention (whether measured in site traffic or another way), you’ll want to look closely at the conversion rate: the percentage of prospects who become customers. The classic way to increase the conversion rate is through testing by measuring one copywriting attempt (or offer, or headline, or something else) against another and going with the winner.

welcoming space. Knitters are welcome to stay for hours, whether shopping or knitting. Guests who happen to be accompanying knitters—usually husbands or children—are also welcome to hang out, sit in comfy chairs, and use the free WiFi while the knitter of the family looks around. (Most, though not all, knitters are women.) A clear online strategy. Most retail stores have a website, but few combine a physical location with an online shopping experience as well as Happy Knits does. “Online is limitless,” says store owner Sarah Young. Even with a large retail space, online sales from around the world constitute more than half the sales. She works the system by maintaining close ties with Ravelry, a social network specifically for knitters, and providing frequent email updates and offers to previous customers. Great displays (in store) and great photos (online). Display, color, and placement are important, so Happy Knits includes a staging area for professional photos in a back room of the store. I asked Sarah why she doesn’t just use the photos provided by the manufacturer the way other stores do. “Because they’re not good enough,” she told me. “We try to do everything here with a focus on quality.” Exclusive deals. By working with yarn companies as partners, Happy Knits creates exclusivity that is hard to emulate. You might think this is an unfair advantage, but the companies offered these deals to Sarah because her customers said such good things about the store and because she is careful to pay vendors on time. (Lesson: To get an unfair advantage, provide remarkable service.) Love for customers. Every order sent by mail includes a personalized thank-you note from an employee, encouraging customers to call if they need help with a pattern, plus free samples of other products. If an item is back ordered because of a computer glitch, an employee will call the customer proactively to apologize and ask if she would like a substitution. “Be nice to people and provide a great service” may not sound like much of a differentiation, but all these things add up. Whether you have a retail store or not, you could learn something from Happy Knits.

Here are twenty-five people from the study, all of whom found ways to differentiate between something merely descriptive and something that evokes a more passionate response. Name: JASON GLASPEY Business: Paleo Plan Fact-Based Description: Weekly diet and recipe planning guide Emotion-Based Promise: Take control of your health by eating naturally (and leave the details to us). Name: BROOKE THOMAS Business: Practice Abundance Fact-Based Description: Course on running a wellness practice Emotion-Based Promise: Increase profits while running a smoother, more streamlined clinic. Name: PURNA DUGGIRALA Business: Spreadsheet templates Fact-Based Description: Templates to help frequent users of Microsoft Excel Emotion-Based Promise: Become an office superhero: Help your colleagues and get your work done quickly. Name: SELENA CUFFE Business: Heritage Link Brands Fact-Based Description: Wine imported from South Africa Emotion-Based Promise: Drink great wine and feel good about supporting minority-owned vineyards. Name: PATRICK MCCRANN Business: Endurance Nation Fact-Based Description: Group triathlon training Emotion-Based Promise: You’re not alone! Join a supportive community of amateur athletes. Name: BRANDY AGERBECK Business: Graphic facilitation Fact-Based Description: Visual documentation of meetings Emotion-Based Promise: Capture your group’s big ideas in a fun way that will ensure a long-term impact. Name: HEATHER ALLARD Business: The Mogul Mom Fact-Based Description: Resources for “mom entrepreneurs” Emotion-Based Promise: Stay home with your kids and earn a good income without going into debt. Name: JONATHAN PINCAS Business: Tapas Lunch Company Fact-Based Description: UK-based importer of Spanish foods Emotion-Based Promise: Viva España! Celebrate the Mediterranean lifestyle without leaving home. Name: REESE SPYKERMAN Business: Design by Reese Fact-Based Description: Website and graphic design Emotion-Based Promise: Your brand is more than a website. We’ll help you tell a story that communicates your core mission. Name: MICHAEL TRAINER Business: Reckoning Studios Fact-Based Description: Media production Emotion-Based Promise: We’ll document your organization’s mission in a short, professionally produced video. Name: ALYSON STANFIELD Business: Stanfield Art Associates Fact-Based Description: Consulting for artists Emotion-Based Promise: Attention, artists: Get paid to make the art you love. I’ll show you how. Name: ELIZABETH MACCRELLISH Business: Squam Art Workshops Fact-Based Description: Weekend retreats for artists and crafters Emotion-Based Promise: Make art in a beautiful lakeside setting with an intimate group of friends. Name: JESSICA REAGAN SALZMAN Business: Heart Based Bookkeeping Fact-Based Description: Bookkeeping and tax preparation services Emotion-Based Promise: I’ll worry about your money stuff so you can spend time running your business. Name: KAREN STARR Business: Hazel Tree Interiors Fact-Based Description: Interior design services Emotion-Based Promise: Make your home a restful sanctuary, a place your whole family enjoys. Name: SARAH YOUNG Business: Happy Knits Fact-Based Description: Retail shop that sells yarn Emotion-Based Promise: Knitting is fun! Come in to learn, restock, knit, or just hang out. Name: ERICA COSMINSKY Business: The Small Business Transcriptionist Fact-Based Description: Service provider that transcribes calls and meetings Emotion-Based Promise: Capture important information that your customers will value, with basic formatting and layout included at no additional charge. Name: AKIRA MORITA Business: Design Kompany Fact-Based Description: Regional leader in design services Emotion-Based Promise: You’ll get the best service from our family-owned shop, and we won’t finish until you’re 100 percent satisfied. Name: DAVID WACHTENDONK Business: Murder Mystery Maniacs Fact-Based Description: Group event planner Emotion-Based Promise: Leave the party planning to us. We’ll bring a fun experience to your group or organization. Name: EMILY CAVALIER Business: Mouth of the Border Fact-Based Description: Ethnic food reviews and “midnight brunch” group experience Emotion-Based Promise: Have fun, eat good food, and spend time with friends during a unique evening. Name: RIDLON KIPHART Business: Live Adventurously Fact-Based Description: Group tours to exotic destinations Emotion-Based Promise: Live adventurously by joining us for the trip of a lifetime. Name: KRISTIN MCNAMARA Business: SLO Op Climbing Fact-Based Description: Community gym and climbing center Emotion-Based Promise: Learn a new, challenging skill in a safe, community-centered environment. Name: SCOTT MCMURREN Business: Alaska TourSaver Fact-Based Description: Coupon books for independent visitors to Alaska Emotion-Based Promise: You’ll recoup your entire investment by using just one of our coupons—leaving you with 200 more to get the best possible discounts. Name: JEN LEMEN Business: Mondo Beyondo Fact-Based Description: Online life planning course Emotion-Based Promise: Learn to turn big dreams into reality in a fun, closed environment with other women. Name: JEN ADRION Business: These Are Things Fact-Based Description: Online store that sells maps Emotion-Based Promise: Our maps will help you remember where you’ve been and dream of where you’re going. Name: CODY LIMBAUGH Business: PXTFitness Fact-Based Description: Personal training and exercise plans Emotion-Based Promise: Want to get in shape but keep falling off the wagon? I’ll help … and it will actually be fun. Note: Some of these businesses are operated by co-owners or another form of partnership. To simplify, I’ve listed the primary contact I talked with during my research.